The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian companies have been urged to seek out new source markets and supply chains given the likely “shocks” and “deleterious impact” that Donald Trump’s proposed tariff measures will have.’

The Bahamas Chamber of Commerce and Employers Confederation (BCCEC, in a statement to Tribune Business, warned its members and the wider private sector to prepare now and get ahead of the protectionist trade measures that the US-president elect is pledging to swiftly enact following his January 20 inauguration and return to the White House.

And, apart from looking for alternative product sources and making different logistical arrangements, the Chamber added that the tariff threat also highlighted the ongoing need for The Bahamas to manufacture and produce more at home including food.

With Mr Trump promising to make good on threats to impose tariffs as high as 60 percent on Chinese-made imports, many of which transit the US before coming to The Bahamas, the private sector body confirmed to this newspaper that the result will be inflation and higher prices for both consumers and local businesses.

“The BCCEC has noted and continued to strategise ahead of the possible tariffs as suggested by the Trump administration which, if enacted, would undoubtedly have a deleterious impact on the business community in The Bahamas as we are a heavily import reliant country,” the Chamber said, urging the private sector to be proactive rather than reactive.

“The BCCEC remains concerned about the impact such a move would have on both consumers and the business community as shocks to the bottom line of a business are typically felt through inflation by the systematic increase in the cost of goods and services to customers as a means to offset the loss of revenue.

“This, we feel, highlights the need to identify alternative markets from which to source goods directly rather than importing imported goods from the US as a third party. Moreover, we are encouraging and emphasising the need to produce as much of our basic food needs as possible at home by partnering with organisations like BAIC, BAMSI and the SBDC, which provides the catalyst for support of local farmers who are using cutting-edge technology to maximise space and production capability without compromising quality.”

Besides the Bahamas Agricultural and Industrial Corporation, Bahamas Agriculture and Marine Science Institute and Small Business Development Centre, the Chamber added that it had been working with other government agencies to diversify The Bahamas’ trade relationships beyond over-dependence on the US.

“We have enjoyed an excellent working relationship with the Trade Commission, Ministry of Economic Affairs and Bahamas Bureau of Quality & Standards to curate trade diversification programmes that allow us to access alternative markets like the South American, Asian, European and African without the encumbrance of middleman price hikes, all the while working through shipping and import logistics to create an environment conducive to mutually beneficial propositions,” the Chamber said.

“Additionally, the BCCEC has led several trade missions and have engaged in meaningful discussions with international organisations like CEDA and JAMPRO, with more on the table for 2025, focusing on bilateral arrangements and trade opportunities for our members to be ahead of the impending challenges that administrative tariffs could impose on our economy.

“We have also welcomed delegates from Indonesia, Malta, Thailand and China who are eager to engage in reciprocal trade of goods and services between our nations. Despite the groundwork, there is much to be done, and we will continue to monitor the proposed changes to help our members be better prepared for the impacts of the same.”

A significant portion of the goods imported into The Bahamas originate in China. Given that Mr Trump imposed tariffs ranging from 7.5 percent to 25 percent on Chinese imports during his first White House stint, his promise to now raise these levies as high as 60 percent cannot be ignored.

Mark A. Turnquest, a corporate consultant and founder of the 242 Small Small Business Association and Resource Centre, told Tribune Business earlier this week that The Bahamas could be plunged back into a renewed cost of living crisis if the US president-elect follows through on his pledge because this nation imports such a high quantity of Chinese manufactured products.

However, other Bahamian merchants said it was too early to react to the US president-elect’s social media warnings. Brent Burrows II, vice-president of retail and sales at CBS Bahamas, told Tribune Business that while Mr Trump’s proposed tariffs are “definitely something to keep an eye on” it was too early to determine how the issue will play out or any local impact.

“Honestly, I’m not too sure,” he said of any potential fall-out. “From our point of view, and from the vendors we deal with out there, they haven’t put out any official communication that says they’re worried about it just yet. It’s just too early to say, and we’ll see what happens after the president’s inauguration in January.

“It’s definitely something to keep an eye on and could potentially be concerning. I don’t know. For now, it all just political bargaining, negotiating in the form of tariffs, but I guess we’ll see as we get closer to [Mr Trump taking office]. Keep an eye on it, keep in close contact with your vendors, and it would be useful for people to know to what extent products coming from China pass through the US.”

Mr Turnquest, meanwhile, estimated to this newspaper that “at least 60-70 percent” of products sold locally come from China “directly and indirectly” with a big portion transiting, or passing through, the US. Besides those that arrive on the US west coast, and are trucked cross-country to eastern ports, Chinese goods also transit the Freeport Container Port heading to the US before being returned to The Bahamas.

He argued: “We have to bypass America and get goods directly from China.... We know there will be a reawakening of the shipping crisis we had a couple of years ago after COVID, but this will be done in the form of tariffs. We know when you tax one thing, you then have to tax another thing and then another thing.

“It will be a downward spiral with extra costs and fees,” he warned of the likely Bahamian impact from Mr Trump’s plans. “We are watching and hoping. We are very, very concerned and we don’t want this to happen. We cannot afford any type of extra inflationary impact with tariffs tacked on because we are already trying to control all sorts of extra costs.

“We are trying to continue to operate and all types of stuff. We don’t need an extra burden. We’re not concerned about Amazon in the short-run, but we are very concerned in the short-run because January 20 is coming and this means we are very concerned about the tariff strategy of Donald Trump,” Mr Turnquest continued.

“It’s going to be detrimental to our businesses. This is a death blow if the Trump tariff strategy is executed. We cannot take that. We cannot cover that extra burden. We just can’t. We hope they take that into consideration.”